In 2024, hardware will become a lifesaver for the Metaverse?

Author: Mu Mu

When the “first year of the Metaverse” opened, the tentacles of technology attempted to place everything that could be digitized in the world of 0 and 1, drawing a virtual extension of time and space.

Neil Stephenson’s virtual city develops along a 100-meter-wide road, with electronic signs on buildings spreading through dimly lit neighborhoods, and people can enter this highly free, developed city through virtual reality glasses to buy virtual land and develop buildings.

In the past 2023, the global influence of the Metaverse concept has been declining. Whether it is Google Trends, Baidu Index or WeChat Index, search for keywords such as “Metaverse” and “Metaverse”, and the popularity curve falls off a cliff.

The concept of the Metaverse is completely out of the circle from 2021 when the parent company of Facebook changed its name to Meta, and the capital and Internet giants were the first to hear the wind, and Roblox, the platform for game creation, became the first share of the Metaverse, and domestic giants such as Tencent, Alibaba, and Baidu have left the layout.

The Metaverse, described as the “3D Internet”, was almost equated with the “future world” for a while, but it was beaten back to the concept period in 2 years. The vision is too big, the global economy is in a downturn, and the Metaverse has not yet appeared in its embryonic form and has been abandoned by capital and questioned by users. When “artificial intelligence” becomes the new darling of technology in 2023, the Metaverse has become an “abandoned child” of capital, and the fate of Pico, which has been updated to the 4th generation, is unknown.

The difficulty of Metaverse implementation is that the future it depicts is too advanced, and it requires almost all new technologies, such as AR/VR (hardware and software), 5G (computing), artificial intelligence (virtual lifeforms), Blockchain (economic systems), and so on.

As the entrance, the XR industry has not made a breakthrough in the past 10 years, and those social, cultural and entertainment activities generated in the virtual space have also been restricted, which also makes virtual people, virtual goods Non-fungible Token, and virtual venues appear ineffective in the Metaverse.

Even so, some of its builders are still trying. While Meta closes the Metaverse space due to benefits, it also releases the Meta Quest 3 headset to continue to upgrade the hardware; Apple is also stepping up the research and development of the spatial computing hardware Vision Pro, the first is expected to be on sale in January 2024; Samsung is restarting the XR hardware plan and is also intensively preparing new products.

Open the channel, in 2024, the headset hardware will be the glimmer of light that shines into the desert of the Metaverse.

The bubble bursts and the industry is under pressure

The most famous Metaverse company is Facebook’s parent company Meta, which had planned to invest $70 billion in the Metaverse for a 10-year period. In 2023, the company that has its name stained with the Metaverse has not entered the ideal Metaverse.

Last year, Meta shocked the industry with “the largest layoff in history”, laying off 11,000 employees, including wearables in the Metaverse division Reality Labs.

Behind the layoffs is a question of profitability. In the global economic downturn in 2023, Zuckerberg called last year the “year of efficiency,” with companies “more proactive in getting rid of” underperforming or non-essential projects.

Meta’s financial report shows that in the first three quarters ended September 30, the company’s total revenue was $94.791 billion, a year-on-year increase of 12%. Meta’s revenue structure is divided into two parts: one is the Family of Apps, which contributed $93.666 billion, an increase of 13% year-on-year, and the other is Reality Labs, which has a revenue of $825 million, a year-on-year decrease of 42%.

In discussing the results, Meta management said that in the first nine months of this year, Reality Labs reduced the company’s overall operating profit by about $11.47 billion, and the division’s operating loss is expected to increase significantly in 2024.

When reducing costs and increasing efficiency became Meta’s main theme, some of its Metaverse plans pressed the pause button. When Meta first entered the Metaverse, this track was hot overseas.

Gaming platform Roblox became the first Metaverse stock in 2021, soaring 54.4% on its first day of listing, and the company’s Market Cap has doubled from $4 billion to $45 billion in just one year. Japanese social gaming giant GREE has announced that it will launch a Metaverse business. Microsoft announced enterprise Metaverse solutions at the Inspire Global Partner Conference.

In China, ByteDance spent huge sums of money to acquire Chinese VR startup Pico (Little Bird Look), Alibaba, Baidu, etc. have also entered the Metaverse, for fear of missing the wind.

Now, searching for “Metaverse” again, the heat curve is close to the ground.

Metaverse popularity plummets (from Google search)

After Meta began to shrink, the pace of global enterprises “retreating” from the Metaverse track has also begun.

Meta initially planned to produce 7 million units of the Quest 3 in the second half of 2023, which has now been adjusted to 200 to 2.5 million units. In 2024, Meta also expects shipments to be reduced to 1 million units.

Two years after being acquired by ByteDance, Pico shrank dramatically, with the team size shrinking from 2,000 to about 1,000. According to IDC’s data for the first half of 2023, in the past two years, Pico has maintained a market share of nearly 60% in China, but in terms of business volume, it is difficult for Pico to contribute much to bytes. Earlier this year, Pico lowered its annual sales target to 500,000 units, a 50% contraction from last year.

In 2023, Tencent almost disbanded the XR team, announcing that it would change its hardware development path, and Xu Chen, the company’s head of XR content ecology, left. The dream bloom of iQiyi’s VR company was exposed to business difficulties, including current and former employees, about 100 people were owed wages, and business was basically stagnant.

The entire industry is under pressure from the bursting of the Metaverse bubble.

Virtual Space Collective “Empty City”

Hardware sales are not ideal, and the Metaverse space is also half-dead.

In 2022, Meta’s virtual world platform, Horizon Worlds, officially took the first step towards making the Metaverse a reality. However, the inner world is not as glamorous as the platform’s trailer, with only 300,000 monthly active users 3 months after its launch.

Last year, some netizens broke the news that Horizon Worlds actually only has 38 real users. Some Youtubers have personally investigated and found that although the real situation is not as “miserable” as the news suggests, it is far from optimistic, and there is a high probability that Horizon Worlds has only about 1,000 daily active users. He tried to count the total number of players on the top 20 virtual planets on the hot list, and found that there were only 902 players.

The halflings of Horizon Worlds have been complained about

Players are “scarcer than rare animals” is a true portrayal of the current Metaverse space.

Faced with the dilemma, Microsoft announced in January 2023 the closure of AltspaceVR, a 3D social virtual space, to cut costs, in addition to withdrawing from several other VR initiatives and laying off 10,000 employees. AltspaceVR is officially out on March 10, 2023.

The Metaverse space of domestic manufacturers has also been almost wiped out.

Baidu Xilang is still a boring product that can only hang out. Recently, Xiyang has created a lightweight mini program entrance, which can quickly enter the Metaverse venue from WeChat mini program or Baidu APP without downloading APP, and also supports one-click sharing. But no matter what the update looks like, the ultimate problem is that this product that claims to be the Metaverse space cannot provide a sense of immersion, and can only stare at the mobile phone screen to “run the map”.

Not only Xiyang, but also Moutai’s Xunfeng, Jay Chou’s music space, etc., have neither the playability of games nor the immersion of the Metaverse. The virtual spaces on mobile phones or computer screens are almost always reduced to “empty cities” after a short period of heat.

Why is it also necessary for Horizon Worlds and AltspaceVR, which support headset connections? Some netizens hit the nail on the head: “Without a headset, you can’t experience anything, but with a headset discovery, it’s better not to experience it.” 」

The software and hardware of the Metaverse are completely disconnected.

A hardware update is coming

When the concept was on fire, funds poured in, and various companies competed for food, but when a large number of virtual spaces, virtual games and other experiences were created, people found that the “key” to enter this virtual world was far from keeping up with people’s imagination of the Metaverse.

VR headsets are bulky and good content is scarce; AR can be thin and light, but its role for ordinary users is limited to watching movies and playing games on a large virtual screen. AR/VR devices not only fail to achieve the high degree of realism and interconnection described in the Metaverse vision, but the price of thousands of dollars at every turn is really worrying about buying “ashes”.

Matthew Power, the “father of Metaverse business”, has pointed out that the premise of the Metaverse is interconnection, that is, the exchange of data between different autonomous systems, and although XR technology has made significant progress, there are still many technical bottlenecks that have not yet been broken to achieve highly realistic virtual experiences.

From 2021 to the present, companies that have laid out the Metaverse have also found that if they want to embark on this road, they must cross the hardware hurdle.

Thus, a watershed emerged. On this long and expensive road, some companies have opted for strategic contraction to focus on self-preservation, such as Pico. But there are also companies that have stepped up and tried to disrupt the market, such as Apple’s Vision Pro.

In the case of the Vision Pro, Apple CEO Tim Cook described it as a space computer, which is the biggest difference from virtual reality devices such as the Quest3, Pico, etc. IT LEVERAGES CAMERAS AND SENSORS TO DELIVER A GAME-CHANGING EXPERIENCE THAT PLACES FAMILIAR IOS APPS IN THE REAL-TIME ENVIRONMENT AROUND THEM, WITHOUT THE NEED FOR ANY HANDLES, USING ONLY EYE MOVEMENTS AND GESTURES.

The Apple app uses Vision Pro to float in the space

For example, the icons you see on your iPhone or computer can float in the space behind wearing the Vision Pro and operate the app with your eyes and gestures, a giant virtual movie screen will appear in front of you, Disneyland will move directly to you, and Mickey Mouse can chat with you on the couch… It integrates almost all the basic functions of gaming, work, and leisure, and realizes the possibility of working and playing in a virtual space.

It can be said that Vision Pro is a headset product that completely breaks the boundary between virtual and reality, according to the plan, it will be sold in North America first this month, and it is expected to enter the Chinese market at the end of the year or early next year, and its second generation is already in development.

Apple’s product may redefine the standard of Metaverse hardware, and Meta and Samsung may also iterate new products under the pressure of the strongest king. CICC predicts that Vision Pro’s experience feedback may exceed market expectations, driving the development of component innovations such as silicon-based OLED, IPD interpupillary distance adjustment, and other technologies, thereby driving VR shipments back to growth.

In 2024, although the Metaverse is cool, the update of hardware will bring a ray of light to it.